Reviews the main activities of corporate governance of a utility in activities such as accountability, autonomy and transparency and control. Reviews the roles and responsibilities among the Board of Directors, Management, and the other stakeholders.
This activity reviews the main actions of corporate governance of a utility in areas such as accountability, autonomy and transparency, disclosure of information, enterprise risk management, and internal control. It reviews the roles and responsibilities among the Board of Directors, Management, and the other stakeholders.
The quality of corporate governance of a company responsible for the provision of an essential service such as electricity plays a decisive role in the decision-making processes of the directors and affects the general performance of the utility. Corporate governance is understood as the relationship between the concessionaire's directors and its owners, and between the directors and other interested parties.
Autonomy, accountability, and transparency are the key concepts and criteria assessed in this area, all of which are relevant to the quality of the utility’s corporate governance, whether publicly or privately owned. The importance of these main areas can be briefly described:
Autonomy: Utility autonomy contributes towards effective management. In a context in which service delivery objectives and associated responsibilities are clearly defined, management autonomy to decide about key aspects of management, such as staffing and remuneration, procurement, making payments, incurring debt, etc., will facilitate effective utility management and help it to achieve its objectives.
Accountability: Accountability to representatives of utility owners and other stakeholders is an important condition that contributes to ensuring that those who have the duty and the power to do so manage third party resources responsibly and in accordance with governance rules established for the organization.
Transparency and control: Transparency is necessary to make accountability effective and to hold the utility responsible for the outcomes of its management, neither of which are possible without ordered, timely and publicly available information. Accounting and financial information play an important role, as transparency of these is essential to assessing utility management and exercising public control.
This activity of autonomy, decision making, controls, and transparency in the utilities is currently under development and will be incorporated soon.